The buyers of the Japanese Yen seem to feel confident now despite the fact that the USDJPY exchange rate is nearing the levels close to which the Bank of Japan started a series of currency interventions. The BOJ is more conservative than the Federal Reserve and the ECB. Together with expectations of QE3, this factor favors those who are now betting on the Japanese currency.
There are concerns that the forthcoming USD GDP report will disappoint investors, which allows Citigroup to assume that USDJPY will continue going down to 76.00.
Nevertheless, Mr. Azumi, Japanese Finance Minister, is currently concerned about EURJPY reaching the 11-year low. He says that currency interventions have been successful so far. He seems to be determined to do his best to resist volatile swings in the currency market caused by speculation.
At the same time, Citigroup doesn’t expect the BOJ to start a new series of currency interventions in the near future. They say verbal measures will be enough.
According to , the Japanese yen has suspended its strengthening against the US Dollar. USDJPY seems to be finishing wave А(С)/С or 3 inside a bigger-scale downswing, represented by А(С) or shortened С of wave level Weekly.
A break below 77.93 will initiate wave 5 or А inside the “Hound of the Baskerville” pattern by Elder/MF. The 77.65 low will act as support. Alternatively, a break and consolidation above the 78.45 high will start a new bullish move. If this is the case, the price may encounter resistance at 78.71 and 78.95.
